Multiple tailwinds in NMDC point to major upside, mine-lease premium weighs

Favourable demand-supply situation pushing up ore prices, value unlocking through demerger, high dividends and cheap valuations are key positives

Govt to sell up to 7.5% in NMDC via OFS on Tuesday, may get Rs 3,621 cr

The company is a consistent, heavy dividend payer, with a likely double-digit yield this fiscal.

Devangshu Datta New Delhi
The public-sector unit, NMDC is a potential beneficiary of the supply chain disruption in global commodity markets. Ukraine and Russia are both major players in iron and steel and iron ore exports, and the war has led to that supply – about 10 per cent of iron and steel exports – being cut off. As one of India’s largest players in iron ore, NMDC has been able to hike prices for the third time since January 2022. Although ore prices may taper in 2022-23, the uncertainties of the conflict and sanctions makes timelines difficult to predict. As of now through the medium-term prices remain firm and NMDC’s prices are still substantially lower – around 40 per cent less than international

First Published: Mar 11 2022 | 9:17 PM IST

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